Spring Statement 2026 summary and highlights

This Government has stated that it has only wanted a single fiscal event a year, which will be the Autumn Budget. As a result, the Spring Statement on 3rd March was brief and included few policy changes or amendments.  

Here's a reminder of the main policy and fiscal changes made since the Autumn 2025 Budget and key tax changes which will come into place for the forthcoming 2026/27 tax year below. Top tips to alleviate tax increases for the 2026/27 tax year affecting your business are covered here.  

Personal tax changes  

Income tax – frozen thresholds for England, Wales and Northern Ireland 

Income tax thresholds were frozen until April 2031 in the Autumn 2025 Budget, meaning pay rises or higher profits extracted are more likely to push you into higher income tax bands, known as fiscal drag. 

Income tax – increases to some Scottish tax bands 

Our Scottish Budget 2026 report details the increases to the basic and intermediate bands. 

Inheritance Tax (IHT) 

In the Autumn 2024 Budget, the Government announced proposals to cap Agricultural Property Relief (APR) and Business Property Relief (BPR) combined at £1 million for 100% relief. 50% relief would be available on assets above this cap. In last year’s Autumn Budget, the Government partially amended this by announcing that the £1 million allowance would become transferable between spouses and civil partners. 

On 23rd December 2025, the Government announced the allowance would increase from £1 million to £2.5 million per estate. 

Fuel duty

With the recent escalation of conflict in the Middle East, there were some rumours that the previously announced phasing out of the long-term 5p fuel duty cut may be postponed further. However, no such announcement was made in this Spring Statement. It remains to be seen whether this, or other measures to offset the predicted rise in petrol and diesel prices, may be announced in the coming weeks and months.  

Business tax changes 

Making Tax Digital for Income Tax 

The first self-employed and landlord taxpayers join Making Tax Digital for Income Tax from 6th April 2026. This means mandatory quarterly updates to HMRC using compatible bookkeeping software. Those with £50,000 or more qualifying income (as stated in their 2024/25 self-assessment tax return) are the first to join, with taxpayers with £30,000 or more joining in April 2027 and those with £20,000 or more joining in 2028. 

For clear and timely information about Making Tax Digital for Income Tax, register for our free webinar on how to avoid penalty points under the new regime on 12th March.  

Dividend tax rates 

From 6th April 2026, income tax payable on dividend income in the basic and higher rate bands will increase to: 

• 10.75% (previously 8.75%) for basic rate taxpayers, and  
• at 35.75% (previously 33.75%) for higher rate taxpayers.  

Limited company owners should review the balance of salary and dividends they take from their company to ensure it remains tax efficient. Contact your accountant, who will be able to support you with this.

Business asset disposal relief – rate increase 

Business asset disposal relief – a reduction in the Capital Gains Tax rate when selling your business or qualifying business assets – increases from 14% to 18% from 6th April 2026.  

Anti-forestalling measures apply, so do talk to your accountant if you are thinking of selling all or part of your business.  

Business rates relief 

Announced in January 2026 for England only, a new business rate relief of 15% for pubs and live music venues, can be added to existing relief from other business rate relief schemes.  

Other business rate reliefs from the Autumn 2025 Budget are summarised here with Scottish specific reliefs detailed here. 

Capital Allowances 

Two changes to Capital Allowances were announced in the Autumn 2025 Budget, namely: 

• 40% first year allowance for qualifying spend – particularly useful for sole traders and partnerships who can’t access full expensing, and those with assets bought for leasing out – began on 1st January 2026 
• The main writing down allowance reduces from 18% to 14% from 1st April 2026 (companies) and 6th April 2026 (sole traders and partnerships) 

Corporation tax – higher penalties for late returns 

From 1st April 2026 penalties for late returns are doubled e.g. the initial late return penalty goes from £100 to £200, and this continues through to £2,000 (up from £1,000) for three late returns. This applies to a return more than three months late. 

Other 

The Chancellor said she would deliver a second Mais lecture in a fortnight that would concentrate on three major choices for our economy. These choices would be on: 

• strengthening European relationships and breaking down trade barriers 
• harnessing the power of AI for Britain 
• spreading economic opportunities geographically throughout the whole of the UK 

It is a case of ‘watch this space’ to see what policies affecting you or your business’ finances may arise from this lecture.  

Keep up to date with future announcements   

Stay up to date with the latest Government announcements affecting you and your business by signing up to our newsletter here. 

Last updated 3 Mar 2026 | First published 9 Feb 2026

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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